The World Bank has revised Kenya’s 2026 economic growth forecast upward to 4.6% from its earlier estimate of 4.4%, citing stronger activity at the start of the year.

The adjustment follows a 5.3% year‑on‑year expansion in the first quarter of 2026, the fastest pace since late 2023 and a sharp rise from 4.0% in the final quarter of 2025.

Key drivers of the rebound included heightened domestic demand, easing financing conditions, a robust tourism sector and a recovery in industrial production.

Tourism led sectoral growth, with accommodation and food services expanding 14.7% on the back of increased international arrivals.

Construction output accelerated to 6.6% growth, supported by higher cement consumption and expanded credit, while manufacturing rose 4.4% driven by cement, vehicle assembly and other industrial goods.

Agriculture, Kenya’s largest economic contributor, grew 4.9% thanks to higher tea production, increased sugarcane deliveries and stronger milk output.

Despite the overall momentum, the private sector showed signs of weakening, with the Stanbic Bank Purchasing Managers’ Index slipping to 49.7 in August, below the 50‑point expansion threshold.

The World Bank noted that persistent supply constraints, high input costs and tight cash flows continue to limit firms’ ability to translate stronger demand into higher output.

Nevertheless, new orders rose for a third consecutive month, employment kept growing and business confidence reached a three‑and‑a‑half‑year high.

Regionally, the Bank lifted its Sub‑Saharan Africa 2026 growth forecast to 4.3%, attributing the improvement to resilient domestic demand, better macro‑economic conditions and investment linked to clean energy and digital technologies.